The Looming Crunch: Software Startups Facing Funding Gaps

The U.S. Venture capital market, while resilient, is entering a period where companies that raised significant funding during the 2020-2022 boom are facing a critical juncture: securing follow-on funding. More than 150 U.S. Software and software-related companies with over $100 million in equity funding haven’t raised capital in over four years, remaining private and without being acquired, raising concerns about their long-term viability.

The Four-Year Funding Gap

A four-year gap between funding rounds is often considered a warning sign for venture-backed companies. It signals increasing difficulty in securing further investment or achieving a successful exit. This is particularly relevant now, as it has been four years since U.S. Venture investment peaked. The surge in funding from 2020 to early 2022, especially within the software sector, led to numerous companies raising substantial capital at high valuations.

Well-Funded, Yet Silent

Collectively, these companies represent a significant amount of capital – over $51 billion in aggregate funding, according to Crunchbase data. The list includes several once-high-profile startups that have remained quiet on the funding front.

Notable Examples

• Carta: The equity and fund management software platform has raised close to $1.2 billion in total funding but hasn’t reported a recent round since 2021.
• OpenSea: The NFT marketplace operator secured over $427 million in equity funding, with its last round closing just over four years ago.
• Calendly: The scheduling app developer raised $350 million in 2021 and hasn’t raised a round since. However, Calendly’s history of self-funding for its first seven years suggests it may not be facing immediate financial distress.

What Happens Next?

The current status of these companies varies. Some remain active, while others have shut down or are in the process of winding down. Many software startups can operate with a reduced team and limited product support without formally ceasing operations. Others may be financially stable due to the capital raised during the peak investment period. As these are private companies, detailed financial information is not publicly available.

Broader VC Trends

Heading into 2026, US venture capital investment is expected to remain strong, with AI-focused companies continuing to attract significant funding [KPMG, 2025]. However, the trend of larger rounds going to fewer companies, particularly in the mid and late stages, is expected to continue [AlleyWatch, 2025]. Traditional tech hubs like California, New York, and Washington are likely to maintain their dominance in attracting venture capital [AlleyWatch, 2025].

Looking Ahead

The coming months will be crucial for these companies as they navigate the evolving venture capital landscape. The ability to demonstrate sustainable growth, achieve profitability, or secure strategic partnerships will be key to avoiding the fate of becoming “stranded unicorns.” The overall health of the venture capital market and the continued interest in software innovation will also play a significant role in determining their future.